The central bank has taken a couple of measures to help rejuvenate the country's capital market, officials said.
Under the measures, loan provisioning rules on mutual fund (MF) units was relaxed further on Sunday, considering the overall market situation, they added.
Besides, the Bangladesh Bank (BB) extended the time-limit by one more year on the same day for adjustment of 'single-borrower exposure limit' by the commercial banks for financing the operations of their subsidiaries, brokerage houses and merchant banks.
"We've taken the proactive measures to bring dynamism in the country's capital market," a senior official of BB told the FE.
He also said the central bank is always giving support for development of the capital market.
The banks are now allowed to keep provisioning on investment in the open-end MFs, if cost price of the unit is higher than 95 per cent, instead of previous 85 per cent, of
the market value or net asset value (NAV) on the basis of current market price.
The central bank issued a circular in this connection on Sunday, and asked the chief executives of all scheduled banks to keep provisioning on the MFs on the basis of the latest directive.
"It will help the banks keep less provision against their investment in around seven open-end MFs," another BB official explained.
The banks will have to adjust the excess amount of their loans over the single-borrower exposure limits for their respective subsidiaries by December 31, 2015, instead of December 31 last year, according to the amended provision.
However, the existing credit level cannot be increased during the extended adjustment time, BB said in a separate directive on the same day.
"Most of the banks have already complied with their single-borrower exposure limits for financing their subsidiaries," the central banker told the FE.
He also said at least five banks are yet to adjust their excess amount of loans over single-borrower exposure limit.
Currently, 30 commercial banks, out of a total of 56, are running 33 brokerage houses and merchant banks as their subsidiary companies.
The central bank earlier asked the commercial banks to finance their subsidiaries, considering them belonging to the same group, to minimise credit risk.
Under the existing provision, the total financing facilities by any bank to any single person or enterprise or organisation of a group are not to exceed 35 per cent of the bank's total capital at any point of time, subject to the condition that the maximum fund-based financing facilities (funded facilities) do not exceed 15 per cent of its total capital base.
However, the single-borrower exposure limit should remain unchanged in the export sector at the existing 50 per cent of a bank's total capital. But funded facilities, in case of export credit, are also not to exceed 15 per cent of a bank's total capital.
The single-borrower exposure limit is not applicable in case of financing power generation, distribution and transmission.
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